Average house prices edged higher again in March, suggesting ‘relative stability’ in the housing market, according to the Halifax monthly house price index.
Prices rose 0.8% in March on a monthly basis, following a 1.2% rise in February, to £287,880, compared to £285,660 the month before. The typical house price is now around 2% below the peak of last August.
The average house price crept up across the regions too, with the strongest growth reported in Northern Ireland (4.9%), followed by the West Midlands (3.8%).
Annually though, the rate of growth has slowed to 1.6% versus 2.1% for the previous three months in a row. Despite this, the monthly rise points to a resilient market overall, the bank says.
Halifax Mortgages director Kim Kinnaird comments: “This is the weakest rate of annual growth in nearly three-and-a-half years (October 2019), having fallen markedly since June 2022’s peak of +12.5%.
“However, overall, these latest figures continue to suggest relative stability in the housing market at the start of 2023 and align with many other recent industry surveys and data.”
Kinnaird attributes an easing of mortgage rates as the ‘principal factor’ behind the improving picture, but predicts a continued slowdown through this year.
House Buyer Bureau managing director Chris Hodgkinson says: “The expectation was that 2023 would see an end to the downward trend of house price decline that followed last September’s mini budget. This seems to have rung true far earlier in the year than many expected although the landscape remains fairly uncertain.
“An eleventh consecutive interest rate hike is sure to further dampen the enthusiasm of the nation’s homebuyers and while it shouldn’t deter them completely, it’s likely we will see more incremental house price gains over the year ahead, rather than the record high rates of previous years.”
Fine & Country managing director Nicky Stevenson comments: “All the signs point to the property market emerging from the challenges it has faced since the mini Budget. Although demand is increasing, so is housing stock. We’re starting to see signs of a much healthier market in terms of supply and demand than we saw during the mad rush over the last two years.”
Adding an air of caution, Hargreaves Lansdown head of personal finance Sarah Coles says: “The fact that inflation remains so high, and prices are still climbing so quickly, means household budgets are still under real pressure. And while mortgage rates have retreated significantly from the peak, they’re still far higher than we’ve become used to.
“When that’s combined with eye-wateringly high house prices, it pushes affordability to the limits. It means we’re likely to see weakness persist in the market, and we’re unlikely to have seen the last of the price falls. The spring bump may not last as long as agents will be hoping.”
Zoopla’s house price index this week showed growth had slowed to 4.1% in March, but said the market is faring ‘better than expected’ with sales on track for one million transactions this year.
There were also promising signs for homebuyer intent in a survey from Legal Bricks.
